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Black Friday, one of the biggest shopping festivals of the year, arrives at the end of November 2024. Retailers, online stores, and dropshippers worldwide will aim to capitalize on the festive demand to boost their sales.
If you want to start a dropshipping business and wonder whether it is legal, we offer all the information you need before launching your venture – just in time for Black Friday dropshipping.
Key Takeaways
- Dropshipping allows sellers to offload processes such as acquiring, managing, and shipping products to a third-party supplier.
- It is an easy way to start your retail business. However, dropshipping can be highly competitive.
- Business owners need to be aware of copyright laws, taxation rules, license compliances, and consumer protection laws to avoid legal issues.
- Choosing the product you want to sell is arguably the most important step in your dropshipping journey.
- Finding reliable suppliers is the most challenging part.
What Is Dropshipping, and Is It Legal?
Dropshipping is an e-commerce business model where an online store sells products without holding inventory. Instead, the seller passes on sales orders to the third-party supplier or manufacturer who ships the products to the end customer.
The dropship model has immense popularity as it allows entrepreneurs to offload tedious and expensive processes of acquiring, managing and shipping products to a third-party dropshipping supplier.
This gives dropshippers time and resources to promote their online storefront and handle customer service.
Yes, dropshipping is legal.
However, entrepreneurs must comply with regional laws such as business registration, import and export rules, taxation, and customer data protection.
Non-compliance with regional business rules is the key risk of dropshipping.
If you are wondering whether dropshipping is legal under 18, you should know that the legal age to start a business can vary from one region to another. In the US, 18 years old is considered the legal age to start a business as minors cannot sign contracts.
According to Shopify, individuals under the age of 18 will require the involvement of a parent or guardian to start a business.
Legal Risks of Dropshipping in 2024
Here are the top legal dropshipping requirements that business owners need to know about to avoid various problems with dropshipping legality.
How to Avoid Dropshipping Legal Issues?
If you’re interested in a dropshipping business, you might wonder how to dropship legally.
Common questions among new dropshippers are: “Is dropshipping risky?” “Can you get in trouble for dropshipping?” The answer is yes, but you can easily avoid dropshipping risks and protect your business by following the steps below:
- Register your business with government authorities.
- Keep an account of your sales and expenses.
- Pay taxes on time.
- Vet and research your dropshipping supplier. Work only with reliable and reputed dropshipping suppliers.
- Don’t sell products that risk copyright infringement.
- Ask your dropshipping supplier for invoices or letters of authorization.
- Be aware of e-commerce platform rules.
- Do not give third-party suppliers access to your dropshipping account or website.
- Do not publish misleading advertisements.
Dropshipping Tricks for Black Friday
Black Friday is a shopping festival on the Friday after the Thanksgiving holiday. It marks the start of the Christmas shopping season. Retailers offer heavy discounts and promotions ahead of the holiday season.
For dropshippers, Black Friday offers a great opportunity to get a sales boost. Here are some tricks to make the most of Black Friday sales as a dropshipper:
- Email marketing
Email marketing is one of the most effective and easiest ways to send sales promotions to targeted audiences. Make sure you send those emails well in advance for better results. - Influencer marketing
Influencer marketing is a marketing method that cannot be ignored in the age of the internet. Influencer marketing can be highly-efficient and targeted as long as you choose a suitable personality for your brand. However, influencer marketing can be costly. - Advertisements
You can publish advertisements on social media platforms such as Facebook and Instagram to ensure that your products gain more visibility. Engaging creatives is important when it comes to social media advertisements. - Discounts
Black Friday is all about discounts. There is no better time to offer discounts than shopping festivals like Black Friday. - Free shipping and easy returns
In addition to discounts, offering free shipping and easy returns can entice customers to buy your products.
Different Dropshipping Platforms: Amazon vs. Shopify
Among the plethora of options, Amazon dropshipping and Shopify dropshipping present sellers with contrasting features to start their operations. Let’s go through them to understand which option is the best one for you.
| Feature | Amazon | Shopify |
|---|---|---|
| Type | E-commerce marketplace | Online store/website builder |
| Ease of setup | Quick and easy process | More detailed process |
| Traffic | About 112 million Amazon Prime subscribers in the US | You are required to drive your own traffic to your website |
| Branding | Customers come to Amazon for products and less for the brand | Suitable for building your brand |
| Fees | Amazon charges commission starting from 2% which vary depending on the product. Amazon also charges delivery fulfillment fees for those who opt for the feature. | Shopify charges monthly fees for creating a website using their platform. Additionally, Shopify also charges payment processing fees. |
| Reach | Amazon is best suited for domestic orders. | Setting up your own website allows you to reach customers internationally. |
| Customer support | Amazon requires sellers to comply with their customer service policies. | As a standalone website, you have control over customer support policies. |
| Product restrictions | Amazon can choose to restrict certain products. | Having your own online store allows you to list any product you want. |
| Rivals | eBay, Etsy | Wix, Squarespace |
The Bottom Line: Is Dropshipping Worth It?
Whether you are in the US, UK, Canada or Australia, dropshipping is legal as long as you are compliant with regional business regulations and tax laws.
If you are thinking of starting your own dropshipping business, you have to analyze whether the benefits and risks of drop shipping suits you.
Although it offers high flexibility, dropshipping business can also be very competitive and difficult if you can’t find a suitable supplier.
